Monday, April 8, 2013

The Iron Lady

Margaret Thatcher, the first female Prime Minister of the United Kingdom, passed away today.

As with all political figures, Thatcher was a complicated leader. It's been quite in fashion for modern-day Britons who were born after she took power to saddle her with negativity, but it is extraordinarily difficult to remember her time.

Thatcher came into power in 1979. Labour had been in power for the past decade or so (less a reasonably short term by Conservative Edward Heath). Trade unions had crippled the economy with ongoing strikes, both unemployment and inflation was high, the IRA was causing endless trouble in Northern Ireland; and the British Empire was, for all intents and purposes, in ruins. Per capita GDP was less than Italy's, an embarrassment for the once-proud nation.

Of course, those who remember know that there was a similar situation in the United States; the 1970's was a sick decade where not much good occurred. Stagflation (high unemployment and high inflation, long thought in economic circles to be highly unlikely to have at the same time) has made the economy a wreck, frequent oil strikes caused transportation to grind to a halt, and the previous government's actions (under both Lyndon Johnson and Richard Nixon) ended up making things worse. However, believe it or not, America's economy was much more robust to handle it; unions had much less universal power and there were few state-run industries. Still, the situations were very similar, so it isn't horribly unusual that both Thatcher and Ronald Reagan won their elections within a year or two of each other. After decades of economic mismanagement (and, of course, a good, old-fashioned dollop of Cold War paranoia) and liberal-state programs, most western democracies were ill and not likely to get much better anytime soon.

Thatcher (and, of course Reagan) were often seen to be the enemy of the unions, and this is not exactly without merit. However, it's also important to remember how much power the trade unions wielded in 1979 Britain. After a series of strikes, things came to a head during the Winter of Discontent: garbage piled up in the streets, hospitals would only take emergency cases, ambulance drivers failed to take emergency calls, various groups struck for wage increases by up to 40% (!), previously agreed-upon contracts were ignored, gravediggers refused to bury the dead and the corpses piled up, and distribution of pretty much all supplies--including food--ground to a halt. In addition, union members would block public access ways and trespass on private property with impunity, descending down into downright thuggery. Regardless of how one thinks of labor unions or socialism, allowing trade unions to have this much power effectively made the economy a wreck. And while the working class was certainly not paid in riches, they were hardly paid sums that would be considered slave wages in that time.

The hidden undercurrent of all this, of course, was Britain's famously rigid class system. Unlike America (for the most part, of course), the average Briton could more or less expect to be in the same class in which they were born. It's quite understandable that, say, a lower working-class young man in a coal district pretty much has no other choice than to become a coal miner, and since he doesn't have a choice he's going to strike to get what he can. On the other hand, it became a vicious cycle; giving people options meant tearing apart the old system, of which the losers would undoubtedly be the trade unionists who had spend the postwar decades building up their operations.

And that is what Thatcher ultimately did. Instead of propping up unsustainable industries, she tore them apart. For better or worse, this caused countless coal miners, garbage men, truck drivers, etc., to be thrown from the workforce and into poverty. However, the old system wasn't working either--it was going to produce a Britain with no future--and anyone who believes otherwise is a fool. Regions of the country that had low-productivity coal seams were going to be shut down because they had to be shut down; the unions tried to prevent this, but Thatcher pushed through anyway. The result was a more robust and diverse economy--but at the expense of the old system.

Beyond this, of course, is Thatcher's stance on the spread of communism, mirroring (mostly) America's policies. Of course, Reagan and Thatcher weren't without their differences, but the solid "special relationship" both nations had with one another no doubt was a massive counterbalance to Soviet expansion. Aside from the Faulklands War, Thatcher's non-communist foreign affairs positions are probably her least defensible, such as cozying up to Augusta Pinochet and clumsily handling South Africa. Still, it's difficult sometimes to remember that in the Cold War era, even that late, choices were often bad and worse.

Ultimately, how you feel about Thatcher's economic process is how you are going to view the legacy of Margaret Thatcher. If you think that the trade unions had gotten too powerful and the economic engine of the British economy had ground to a halt, Thatcher should rightly be considered a stellar success. If you think that Thatcher's drastic dismantling of the state made her a fascist anti-labor zealot, she's obviously going to be a disaster.

The Pledge: It's easy to forget the climate of the times or the consequences of inaction. Thatcher did what was necessary, even though it may not have been easy or popular. The British Economy--and way of life--was disintegrating, and it was a direct consequence of the actions of the government and the unions. Fixing this wasn't easy or popular. However, the fact that she was elected three times and is the UK's longest-serving Prime Minister is telling.